Current methods of inventory management in retail stores for titles (such as music recordings and video game software) held for resale fail to optimally satisfy consumer demand and increase product cost. These deficiencies result principally from the cost of financing large inventories of titles held for resale and the failure to accurately anticipate consumer demand for individual titles and implement proper inventory management practices to satisfy such demand. These problems can have a significant adverse impact both on retailers and on the producers and distributors of items sold at retail.
As currently structured, retailers typically must maintain a large in-store inventory of titles for resale in order to be assured they have sufficient supply to satisfy consumer demand for such items. In addition, retailers often must maintain a large in-store inventory of titles to provide a means of displaying and merchandising titles within the retail environment. For example, consumers of products such as audio compact discs or cassette tapes typically browse through a large number of displayed titles to find a preferred selection and to determine if there are other titles which they are not aware of that they may desire to purchase. Moreover, while such "browsing rack" displays are presently the most widely practiced form of in-store merchandising of consumer music and video game titles, they offer limited merchandising and cross promotional opportunities other than grouping by general subject categories and alphabetizing the artist or game titles thereunder.
Often, however, large amounts of inventory are not sold and must be discounted to a price which generates consumer interest. In addition, insufficient inventories of popular titles result in lost sales which may be subsequently made by a competitor or lost altogether due to a loss of consumer interest in the title originally sought to be purchased. Moreover, particularly with respect to music titles, a large number of unrealized sales may result from a lack of inventory of older titles for which there is limited individual demand, but which in their aggregate could result in significant sales volume. There also tend to be unrealized sales when older titles no longer carried in inventory (or stocked only in limited quantities) become popular as a result of unexpected publicity or popularity of a title or artist resulting from receipt of an award by the artist for a recent work or past achievement or the use of a song in a newly released medium.
These "inventory management" issues have a significant impact on the producers and distributors of music, video game and other entertainment titles. In industries such as music and video game software, which are characterized by "hit" titles for which there may be very high consumer demand for a relatively brief time cycle, accurate inventory management is particularly important. A misjudgment in the number of expected sales of a particular music or video game software title (and related decisions regarding number of units of such title produced and distributed) could result in missing a significant market opportunity (for a short-cycle "hit" title for which limited supply is available) or a loss situation (resulting from the investment of a significant amount of money in producing and distributing a title for which there is no consumer demand and, as a result, an unwanted overstock of product). Overstock in particular can be a significant problem to producers and distributors of music and video game software titles that maintain policies of "buying back" or accepting returns without penalty of all or a portion of overstocked inventory or providing credits towards future product purchases by retailers.
Recognizing some of these shortfalls, systems have previously been proposed for the reproduction of titles at a point of sale location as they are purchased. Although these proposals have recognized some of the advantages in implementing such a system, they have been impractical for commercial implementation due to their inability to deliver necessary data for the reproduction of titles in an economically viable manner and within practical time constraints. For instance, U.S. Pat. No. 4,528,643 to Charles C. Freeny, Jr. (the "Freeny device") describes a system having a remote information control machine for updating data stored in an information manufacturing machine located at a point of sale location. The information manufacturing machine includes means for reproducing prerecorded music titles on eight track tapes with data stored in its internal memory. The Freeny device further provides that the information manufacturing machine receive authorization from the remote information control machine prior to the reproduction of a music title at the point of sale locations. The information control machine in the Freeny device serves to receive captured data, convert the data to a digital format and update the data storage facility located within the information manufacture machine. Data stored in a memory file unit within each information manufacturing machine is provided with an encoding scheme which serves as a security system for the unauthorized reception of the data necessary for the manufacture of the material object.
The Freeny device has several drawbacks which make the system impractical for commercial implementation: (1) the data file for each title requires a large memory storage capacity, (2) each remote location must have on site data storage for every title to be manufactured, (3) data delivery to point of sale locations for anything beyond a short authorization code and other sale tracking data is impractical in cost and time requirements, and (4) manufacturing time for titles not stored on site in the data storage facility for a particular remote location is slow (and commercially impractical for the consumer retailing environment).
The implementation of a commercially practical on demand data delivery system for the preview, selection, retrieval and reproduction at remote locations of titles on selected media within the time constraints of a retail shopping experience would eliminate or substantially reduce the deficiencies in current retail practices described above. It would afford a great commercial advantage both to retailers and producers using the system. In addition, the system would optimally satisfy consumer demand by providing virtually limitless inventory of popular titles which can be previewed and selected for purchase through an easy to use terminal that provides a unique shopping experience. Moreover, it would eliminate the need to produce and transport to remote locations previously recorded or programmed titles for which there is little or no consumer demand, resulting in a much more efficient use of energy and resources than is possible with existing practices.
It is therefore an object of the invention to provide a commercially practical on demand data delivery system for the preview, selection, retrieval and reproduction at remote locations of above described titles and additional materials. It is a further object of this invention to provide a system which permits for improved marketing, selection and previewing capabilities without the need for maintaining large inventories of materials at a point of sale location.